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Gold Prices Power To 6-Yr. High On Easy Fed

Kitco News

(Kitco News) - Gold and silver prices are solidly higher in early U.S. trading Friday. Gold notched a six-year high, while silver prices hit a 13-month peak. A key U.S. Federal Reserve official Thursday afternoon surprised the marketplace by his aggressively dovish comments on monetary policy. August gold futures were last up $11.20 an ounce at 1,439.30. September Comex silver prices were last up $0.202 at $16.40 an ounce.

The marketplace is still buzzing about remarks made by influential New York Federal Reserve Bank President John Williams Thursday afternoon. He suggested the Fed should be more aggressive in its monetary policy actions to prevent a slowdown in the U.S. economy. That led some market watchers to believe the Fed could do a 0.5% rate cut at its late-July FOMC meeting. Later, the Federal Reserve tried to “walk back” Williams’ comments. St. Louis Fed President James Bullard on Friday said a 0.25% U.S. rate cut in the near term is appropriate.

Asian and European stocks were mostly higher overnight. U.S. stock indexes are pointed toward slightly higher openings when the New York day session beings. The U.S. indexes hit record and contract highs earlier this week.

The U.S. dollar Thursday afternoon dropped and U.S. Treasury prices rallied in the aftermath of Williams’ remarks.

The key “outside markets” today see Nymex crude oil prices firmer and trading just below $56.00 a barrel. The oil market bulls have faded this week amid talk the U.S. and Iran could start talking, regarding U.S. sanctions on Iran. However, there were also reports the U.S. military and Iran’s military are challenging each other near the Strait of Hormuz, including unconfirmed reports the U.S. shot down an Iranian drone. Meantime, the U.S. dollar index is higher today on a rebound following the sell off Thursday following Williams’ comments.   

U.S. economic data due for release Friday is light and includes the University of Michigan consumer sentiment survey.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold bulls have the solid overall near-term technical advantage. A seven-week-old uptrend is in place on the daily bar chart and prices just saw a bullish upside “breakout” from the recent trading range on the daily bar chart. Bulls’ next upside price objective is to produce a close in August futures above solid resistance at $1,500.00. Bears' next near-term downside price breakout objective is pushing August futures prices below solid technical support at $1,400.00. First resistance is seen at today’s high of $1,454.40 and then at $1,460.00. First support is seen at today’s low of $1,436.20 and then at $1,425.00. Wyckoff's Market Rating: 8.0

Live 24 hours silver chart [ Kitco Inc. ]

September silver futures bulls have the solid overall near-term technical advantage and have momentum on their side. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $17.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $15.625. First resistance is seen at today’s high of $16.50 and then at $16.75. Next support is seen at the overnight low of $16.27 and then at $16.00. Wyckoff's Market Rating: 8.0.

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